Tuesday, March 2, 2010

5 Payoffs of Sales Performance Management


By Lorna Heynike, SVP Marketing, Callidus Software

CRM systems rely on subjective data that’s entered by the sales team. But accurate, real-time performance data with a sales performance management (SPM) system takes the guesswork out of how employees are really performing.

After the economic environment we saw in 2009, a framework to plan and model sales strategies that ensures timely execution of sales initiatives and visibility into performance is a must. If nothing else, the downturn should have woken up sales departments, uncovering the need for modernization and automation in order to deliver the best value to their organizations

Gartner reports that an SPM system can improve sales performance by 5 to 10%. Due to the significant amounts that companies set aside for incentives, for some, that can mean millions of dollars. But also for smaller companies, incentives are typically the largest or second-largest line item on their P&L sheet. Either way, that is no small change.

SPM systems can assist companies in meeting business goals and objectives. They manage the entire sales lifecycle and align execution with corporate objectives – across every department and reaching every employee. SPM systems help companies stay aligned with sales programs, driving performance, revenue and ensuring quick ROI.

Callidus believes there are five payoffs a company can expect after implementing an SPM system:

  1. Measureable incentive plans – SPM systems provide the ability to align sales with corporate initiatives, giving employees and channel partners a clear understanding of how they are being measured and compensated. When considering the retail banking industry, branch offices have become the selling face of a company, so it has become imperative that banks offer measureable incentive plans to their branch managers, tellers and other customer-facing employees. These plans offer transparency into broker commissions for easier administration and regulatory oversight – and happier employees.

  2. Better sales targeting – Systems can be quickly changed to reflect new sales initiatives, as well as market trends and sales across territories. In the pharmaceutical industry, better sales targeting has helped to reward sales appropriately when facing issues of prescriptions moving from one sales territory to another. These plans have also addressed organizational issues in the pharmaceutical industry by making sure two reps do not compete against each other across therapeutic portfolios.

  3. Greater sales satisfaction – Faster deployment of sales plans and more equitable territory and quota management make for a motivated sales team, maximizing the full sales team potential. This is best seen among the insurance industry by enabling the management of a shifting portfolio of traditional and alternative distribution channels. Insurance sales teams have experienced accurate payments, transparent information and clear, auditable processes.

  4. Reduced turnover – Insight into fair allocation of sales opportunities allows for the entire sales team to be aware of the teams overall quotas, status and expected productivity. Managers can quickly update plans and distribute them on time so representatives’ selling strategy is consistently in line with business targets. Clear visibility into sales through accurate reports and payment builds stronger confidence in the system resulting in dramatic decrease in disputes, significantly reduced shadow accounting and increased morale as well as staff longevity

  5. Timely and realistic quota setting – Reducing the risk of attainment shortfalls or un-forecasted sales compensation exposure allows for realistic goals to be set and tracked. Managers can easily model and adjust quotas based on the needs of the business, such as named accounts or product mix. With up-to-date visibility into sales quotas, managers can ensure sales execution is always aligned with corporate goals.

Sales teams will have the best chance at moving forward and achieving success when all information necessary for them to do their jobs is available at their fingertips. Sales performance management helps to better align incentives with corporate objectives, manage the entire sales lifecycle and improve sales performance and increase profits.

Lorna Heynike has over 15 years of experience in developing and marketing enterprise-class applications. At Callidus Software, Lorna has led the effort to develop a series of sales performance and performance management solutions. She spearheaded the development of Monaco, Callidus' cutting-edge line of SaaS sales performance products. Prior to joining Callidus, Lorna worked for Oracle, where she managed incentive compensation, marketing and leads management solutions.

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